The ability of lower vertebrates to regenerate an injured optic nerve has been widely studied as a model for understanding neural development and plasticity. We have recently shown that, in goldfish, the optic nerve contains two molecules that stimulate retinal ganglion cells to regenerate their axons in culture: a low-molecular-weight factor that is active even at low concentrations (axogenesis factor-1) and a somewhat less active polypeptide of molecular weight 10,000-15,000 (axogenesis factor-2). Both are distinct from other molecules described previously in this system. The present study pursues the biological source and functional significance of axogenesis factor-1. Earlier studies have shown that cultured goldfish glia provide a highly favorable environment for fish or rat retinal ganglion cells to extend axons. We report that the glia in these cultures secrete high levels of a factor that is identical to axogenesis factor-1 in its chromatographic properties and biological activity, along with a larger molecule that may coincide with axogenesis factor-2. Axogenesis factor-1 derived from either goldfish glial cultures or optic nerve fragments is a hydrophilic molecule with an estimated molecular weight of 700-800. Prior studies have reported that goldfish retinal fragments, when explanted in organ culture, only extend axons if the ganglion cells had been "primed" to begin regenerating in vivo for one to two weeks. However, axogenesis factor-1 caused the same degree of outgrowth irrespective of whether ganglion cells had been induced to regenerate new axons in vivo. Moreover, ganglion cells primed to begin regenerating in vivo continued to extend axons in culture only when axogenesis factor-1 was present. In summary, this study shows that glial cells of the goldfish optic nerve secrete a low-molecular-weight factor that initiates axonal regeneration from retinal ganglion cells.